The Price Isn’t Always the Problem

It’s June, the beginning of summer travel season.

Just when your mood is elevated in anticipation of thoroughly enjoying yourself, you hear: “That’ll be $22.99 for that pillow, ma’am.”

Pop! goes your good-mood balloon.

Most travelers understand that airlines need to make money. What we dislike is the feeling that every aspect of the experience comes with another charge. First the ticket. Then the checked bag. Then the food. Then the blanket. Then the pillow. Ugh!

By comparison, many cruise lines have moved in the opposite direction. One price covers the room, meals, entertainment, and often much more. Is it more expensive? Usually. Is it more relaxing? Almost certainly.

The Pain of Paying

Marketing expert Roger Dooley recently explored why. The answer lies in something psychologists call the pain of paying.

Every time we reach for our wallet, we experience a tiny amount of friction. One payment isn’t a big deal. Twenty payments become exhausting, right?

Think about how often this principle appears:

• Amazon Prime bundles shipping into one predictable fee.

• Streaming services let us enjoy unlimited music, movies, and shows without deciding whether each one is worth another $4.99.

• Prix fixe restaurant menus remove the mental math of calculating every appetizer, entrée, dessert, and glass of wine.

After all, you don’t walk into Disneyland and discover that meeting Mickey Mouse costs an extra $9.99, viewing the fireworks is another $14.99, and waving at Goofy requires a Premium Character Interaction Pass.

Customers don’t necessarily object to paying more.

They object to paying again. …and again!

That distinction matters.

Reducing Pain Points

Here in wine country, many wineries have learned this lesson. A flat $10 shipping offer may not always be the cheapest option for the winery, but it removes uncertainty. Customers know the answer before they reach checkout.

There’s less friction. Less hesitation.

Of course, not every business can bundle everything into one convenient package. But the principle is worth considering:

• What can you bundle?

• Where can you reduce pricing friction?

• What can you make easier to buy?

And if bundling doesn’t fit your business model, could a subscription model accomplish something similar?

Instead of asking customers to make the same buying decision over and over, could they pay one predictable monthly fee? That could translate into one delivery per week or one maintenance visit per month. Or, maybe that’s one service plan or membership.

Most certainly it will be one less thing to think about…which customers love.

The lesson isn’t that customers always want the lowest price. Often, they want the easiest decision.

Here’s a question to consider: If a customer had to explain your pricing to a friend, could they do it in one sentence? If not, there may be an opportunity to remove a little friction—and create a much better customer experience.